Largo Resources Announces Record Q4 and Full Year 2018 Production Results and Provides 2019 Guidance

Date: Jan 10, 2019

  • Record production of 2,595 tonnes of V2O5 in Q4 2018, a 2% increase over Q4 2017
  • Record FY 2018 production of 9,830 tonnes of V2O5, exceeding midpoint guidance of 9,650 tonnes by 2% and a 6% increase over FY 2017
  • 2019 Guidance: Annual V2O5 production of 10,000-11,000 tonnes; Average annual cash operating costs excluding royalties1 of US$3.45-3.65 /lb V2O5; Sustaining capital expenditures of US$10-14 million; Expansion capital expenditures of US$10-14 million
  • Largo Resources Ltd. (“Largo” or the “Company”) (TSX: LGO) (OTCQX: LGORF) is very pleased to report fourth quarter and full year 2018 production results from its Maracás Menchen Mine highlighted by a new quarterly production record of 2,595 tonnes of vanadium pentoxide (“V2O5“) and record full year production of 9,830 tonnes of V2O5. Largo delivered strong operational performance in 2018 exceeding the Company’s midpoint guidance of 9,650 tonnes of V2O5 at record production rates. Management is confident in its ability to deliver continued operational success through its production and cost guidance for 2019.

Total production from the Maracás Menchen Mine in 2018 was 9,830 tonnes of V2O5, exceeding the Company’s midpoint of guidance by 2%. This represents an increase of 6% over FY 2017 and is the strongest full year of production from the mine since operations commenced in 2014. The Company also achieved a new quarterly production record in Q4 2018 with 2,595 tonnes of V2O5 produced, up 2% from the previous quarter and representing the fourth consecutive quarter of production growth during 2018.

Global V2O5 recovery rates averaged 77.0% in 2018 representing an increase of 2% over the year prior. Recoveries of 75.3% in Q4 2018 averaged somewhat lower when compared to 77.1% in Q3 2018 due to issues with kiln stability. Following the kiln refractory replacement in Q1 2019, the Company expects recoveries to stabilize throughout the year as it continues its focus on established maintenance programs and best production practices at the mine.

A summary of Q4 and FY 2018 production results from the Maracás Menchen Mine is presented below:

Maracás Menchen Mine ProductionQ4 2018Q3 2018Q2 2018Q1 2018FY 2018
Global recovery2 (%)75.3%77.1%79.2%75.9%77.0%
Concentrate produced (tonnes)92,19088,07585,63977,222343,126
Grade of concentrate (% V2O5)3.27%3.48%3.37%3.56%3.41%
Contained V2O5 (tonnes)3,0163,0652,8892,74711,717
V2O5 flake produced (flake + powder) (tonnes)2,5952,5632,4582,2149,830
V2O5 produced (equivalent pounds)35,721,0005,650,0005,419,0004,881,00021,671,000

Mark Smith, Chief Executive Officer of Largo, stated: “Largo’s ability to consecutively increase its production at the mine is a testament to the very skilled operations team at Maracás and has enabled the Company to exceed its midpoint guidance of 9,650 tonnes ofV2O5 for the year. We are also very proud to report yet another quarterly production record from the Maracás Menchen Mine in addition to a new record of full year production for 2018.”

He continued: “During the year ahead, Largo will continue its focus on profitability and looks forward to reaping the benefits of the increased production rate as a result of the Company’s ongoing expansion project. The expansion project to increase nameplate production capacity to approximately 1,000 tonnes of V2O5 per month is progressing on time and the Company expects to reach the new nameplate capacity rate in Q3 2019.”

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